Impact of Dividend Policy on Shareholders Wealth; Evidence from NSE Automobile Index

This study examines the impact of dividend policy on shareholders wealth on selected companies of Automobile sectorial index of NSE. The study covers the period from 1st April 2007 to 31st March 2017, which consists of ten years. In order to fulfill the objective of the study the researcher has collected dependent and independent variables. The dependent variable is market price per share i.e., shareholder wealth and the independent variables are DPS, EPS, PER, Earnings, Firm size and ROA. The collected data has been tested by different econometric tools like correlation matrix, Pooled Least Square Regression Equation, Fixed Effect model, Random Effect model and Hausman Test. The empirical findings of the study exposes that there is a significant impact on dividend policy and earnings per share, price earnings ratio and return on assets. There is no significant difference between dividend policy and earnings and firm size.